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Wednesday, Jun 7, 2023

Restructuring Costs Clip Avery Dennison

Avery Dennison Corp. on Friday announced fiscal fourth quarter and full year results that missed Wall Street expectations for profit, as the company continues its restructuring. The Glendale label maker reported net income of $43 million (43 cents a share) for the quarter ended Dec. 28, compared to $49 million (48 cents) for the same period last year. Revenue rose 7 percent to $1.58 billion. The company’s earnings failed to meet analysts’ average per-share estimate of 68 cents, but exceeded revenue expectations of $1.5 billion, according to Thomson Financial. Avery Dennison’s core business – pressure-sensitive, self-adhesive labels used on a wide range of consumer products and reflective highway-safety signs – reported an 8 percent rise in sales to more than $1.1 billion. The company said not counting restructuring costs, including fourth quarter severance payouts of more than $6 million, its net income would have been $68.1 million (69 cents), narrowly surpassing expectations. On Wednesday the company had declared a quarterly cash dividend of 29 cents a share. As demand for paper office products has shrunk amid the further digitization of the work environment, Avery Dennison sold its office products and engineered-solutions divisions on July 1 to CCL Industries Inc. of Toronto, a printing and label company, for an estimated $400 million. Earlier this month, the company relocated from its longtime headquarters in Pasadena to occupy a smaller space at 207 Goode Ave. in Glendale. Chairman and Chief Executive Dean Scarborough said he was pleased with the results, as cost-cutting will result in future growth. “We will continue to deliver on our long-term financial commitments through top-line growth, margin expansion, and disciplined capital management,” he said. For the year, Avery Dennison reported net income of $216 million ($2.16 a share), compared to $215 million ($2.08) in 2012. Revenue rose nearly 5 percent to $6.1 billion. Analysts had expected annual per-share net income of $2.66 on revenue of $6.1 billion, according to Thomson Financial. The company repurchased 6.6 million shares last year at a cost of $283 million. Shares closed down 45 cents, or nearly 1 percent, to $49.27 on the New York Stock Exchange.

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